Earnings Watch: FedEx Profit Falls Due to Cyberattack, Hurricane Harvey

FedEx Corp. on Tuesday afternoon reported its earnings during its fiscal 2018 first quarter fell 17% from a year ago as a result of a cyberattack and Hurricane Harvey, despite a slight improvement in revenue, and it's planning higher shipping rates.

The Tennessee-based parcel delivery and trucking company reported net income of $596 million, or $2.19 per share, for the three months ending Aug. 31, compared to net income of $715 million, or $2.65 per share, during the same time in 2016.

Total revenue in the most recent quarter increased 4% from a year earlier to nearly $15.3 billion.

According to the company, the results benefited from higher base rates at each of its transportation segments. However, they were offset by reduced revenue and increased expenses resulting from the TNT Express cyberattack, TNT Express integration expenses, higher costs at FedEx Ground, a higher tax rate, and the effects from Hurricane Harvey.

The worldwide operations of TNT Express were significantly affected during the first quarter by the June 27 “NotPetya” cyberattack. Most TNT Express services resumed during the quarter. and substantially all TNT Express critical operational systems have been restored. However, TNT Express volume, revenue and profit still remain below previous levels, according to FedEx.

For the first quarter, FedEx Freight, the company's trucking segment, reported revenue increased 6% to $1.75 billion while operating income improved 30% to $176 million.

Revenue increased primarily due to higher base rates, increased weight per shipment and higher fuel surcharges, according to FedEx. Average daily less-than-truckload (LTL) shipments grew 1%. Operating results improved primarily due to higher LTL revenue per shipment.

The FedEx Express segment, which includes TNT Express, saw revenue increase 2.2% to $8.65 billion, but operating income fell 29% to $433 million.

The company reported revenue grew primarily due to higher U.S. domestic package base rates and strong international ...Read the rest of this story

More freight and more MPGs

This past spring Reuters published an article with the following headline: U.S. Energy Information Administration Projects Diesel Fuel Consumption Increase on Growing Freight Transport Demand.

The article stated that U.S. freight movements have been increasing which will boost the consumption of diesel fuel. It also said, “The tonnage of freight moved by road, rail, barge, pipeline and air cargo has been increasing year on year since October, after stagnating for much of 2015/16.”

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Mount Designed for Tablets, ELDs

MyGoFlight's Flex Suction Automotive Mount is designed for drives to mount a tablet, ELD or other electronics in the cab.

The Flex Suction has been designed to meet the needs of drivers and attaches securely to any glass windshield, side window, or other smooth surface.

The mount can be customized with different holders to fit multiple devices, types of suction cups for the application and anti-glare screen protection for better visibility.

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Q&A: A Truck Dealer Talks About Industry Challenges

Jodie Teuton

Jodie Teuton, vice president of Kenworth of Louisiana, talks about how issues facing truck dealers are impacting fleets as well as shares her thoughts on the challenges dealers face today. Kenworth of Louisiana is a full-service dealership with seven locations throughout Louisiana. The dealership sells and services Kenworth and Hino trucks.

HDT: The American Truck Dealers has been actively working to get the Federal Excise Tax on trucks repealed. How will the repeal affect fleets?

Teuton: It would roll back the high price of a truck. When we talk about tax reform in this country, we think that the time is right to repeal FET. The $12,000 to $22,000 FET adds to the purchase price of a new truck is egregious in my opinion. If you know anything about excise tax, you know that it is loosely called a sin tax. Tell me what is sinful about trucks? We have excise tax on alcohol and those kinds of things. The FET on trucks was enacted during WWI to help fund the war.

We keep talking about the need to have clean trucks on the road. We are all for clean air. The earth is a closed system and we must take care of it. But the way to keep the air clean is to get trucks off the road that are not clean. To do this, we need to put new trucks on the road.

Fleets, like any other business, have to stay in the black to keep going. Yet the cost of the trucks keeps going up and up. How much can the customer bear? FET is a disincentive for fleets to buy cleaner trucks.

Trucking has given. It is time for us to get a break. Trucking as a whole is paying a whole lot more than our fair share. ...Read the rest of this story

ATA names new legislative affairs leaders

The American Trucking Assns. hired Ed Gilroy as the federation's new senior vice president of legislative affairs and Jay Lim as vice president of legislative affairs, the group announced on Sept. 18.

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Tucker Tools launches new freight-matching technology

Trucker Tools is introducing the next evolution in freight matching technology with the launch of cloud-based Smart Capacity, the company announced this week.

Smart Capacity is a new cloud-based platform that combines instant carrier-driver connectivity and powerful analytics to continuously aggregate capacity and predict when and where it will become available for third-party brokerage and logistics providers (3PLs).

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Truckload turnover rate surges in second quarter

The turnover rate at truckload carriers surged in the second quarter of the year, a sign that the market for drivers is quickly tightening, according to American Trucking Assns. Chief Economist Bob Costello.

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